[dulse]

I see this as one of the most fundamental problems the next generation will need to face. How do we build better models to give access to wealth creation outside a small number of highly leveraged technology companies to a wider group of society? Recent trends in the gig economy, AI, and medicine make me worry more we are slipping toward a super asymmetrical world like Gattica or Altered Carbon -- which is not the world we should want to live in. We should want to preserve a strong path to the American middle class for everyone.

Despite the hype, I'm bullish on cryptocurrency tokens on potentially being a model of a more equitable design for firm returns. If done correctly, the returns of firms could go to the early participants in the network, instead of the VCs and early accredited investors that have special access. The ICO world today isn't there yet (a lot of pre-sale discount tokens to those privileged VCs; lots of ICOs aimed at the larger public are scams, and it's hard to tell the difference between them) but I think we have the tools to create more equitable models, if we only have the will.

[cortesoft]

I really don't see how crytocurrency is going to solve this problem at all.

It does not prevent the problem of a few people having way more wealth/power than others; at best, it just chooses a different set of people to be the wealthy ones.

[dulse]

I agree with you the current versions I've seen feel this way. But I like to think of it as programmable money: it can be whatever we want it to be.

Imagine an ICO that gives more reward when users provide a proof-of-income, and more tokens go to those worse off (sort of like a graduated income tax, but for ICOs). Not saying it's a good idea, just that it's programable so we can make it do whatever we think is best, it's up to us to determine what's best. The right model would require some iteration and experimentation.

There are hard challenges I don't have an answer for -- eg, the less well off probably overlap with those less likely to be engaged with weird internet experiments -- but they feel surmountable, if we want to solve it.

[manjushri]

While it's not a silver bullet and has a long way to go, advances in alternate models of money distribution such as cryptocurrency do seem to be moving us towards a more decentralized monetary system

[cortesoft]

Right, but the question is what reason do we have to believe that a decentralized monetary system will be more equitable? Being decentralized is no protection against inequality.

[JoeAltmaier]

Yes; I've always been baffled by the idea that an unmanaged currency will be better. Either tragedy-of-the-commons, or some gorilla(s) exploiting it, seems the very likely outcome.

[cortesoft]

Right? Anyone who gains power or wealth can utilize that power to accumalate more and/or prevent others from also gaining power and wealth. It doesn't matter if it is centralized or decentralized.

However, by being decentralized it prevents any mechanism of checking the power gained. Yes, centralization can be used as a means of maintaining power, but it can also be used as a way of checking power. Decentralization has no way of checking power.

[manjushri]

>what reason do we have to believe that a decentralized monetary system will be more equitable?

For the same reason that democracy is more equitable than a dictatorship or a monarchy

[nerfhammer]

isn't that what the 1999 dot-com bubble was? firms could go public almost right out of the gate and then Joe Average investors could buy and sell equity of these immature firms?

[montrose]

Yes. And the wildly varying returns achieved by these retail investors surely increased rather than decreased economic inequality.

[bargl]

It would be nice if there was a VC that could operate like the stock market was supposed to. You invest in the VC and you get a share out. But that share can be really really small. 100$ or less. And you get an ROI. I've thought about that before but I have no clue how or what shape that would take with my limited knowledge of the legality behind VC funding.

[twic]

Is this assuming that the venture capital industry outperforms the general stock market? I don't think it consistently does. I don't have massive or recent data, but here's a report from a few years ago:

https://nvca.org/pressreleases/venture-capital-outperformed-...

Despite the headline, if you compare the venture capital indexes with the S&P 500, there's no clear winner. Except at the 50-year time horizon, where the early-stage index went to the moon. Good luck investing in that.

[frgtpsswrdlame]

It's not just about returns but also diversification. An open VC would allow people to invest in early-stage companies, not just mid/late-stage companies like the stock market. You'd never want to have too much of it because of the enhanced risk but a small allocation for diversity wouldn't be bad.

[bargl]

I was more thinking that the stock market is being gamed by a massive amount of computers where as I don't see that happening in VC yet.

[currymj]

HFT has a lot of impacts and may be good or bad overall, or socially useless, or whatever. but it undeniably does result in a better deal for a normal person trying to make small investments -- they've replaced the old market makers but charge much less for the job.

[tonystubblebine]

A lot of VC returns are based on eyeballs and a lot of eyeballs are actually giant Bot networks.

[Aunche]

The reason you can't do that is to protect the system from abuse. Kickstarter already has a bunch of scammers, but it's not as bad because people are spending disposable income on it and not using it as an investment. As soon as you let the average Joe speculate on start-ups, thousands of companies will pop up trying to figure out the best way to scam people.

[theseatoms]

How is this different than the stock market?

[bargl]

VC has access to these stocks before they are available on the stock market. These are also stocks that aren't traded in micro transactions so they can't be gamed by Machine Learning.

[raiflip]

This is a very upper-middle class view of the economy because it very much represents the difference between most people and upper middle class - those in the upper middle class tend to be employees of successful tech or medical companies, and that makes sense since most people here fall into that category.

However looking at the data there is another section of the economy where the 1% and .1% reside, i.e those who own mid to large size companies or are high up exectives. In that section you'll see owners of companies like Walmart, Target, really any successful company. Doesn't have to be tech or medicine. The point being those sectors of the economy have been hit the worst by de-unionization because they aren't necessarily booming (even if they earn a profit) so without a union employees have very little bargaining power.

If you want to really reduce inequality you have to compress those sectors of the economy by leveling the field between employees and business owners.

[skookumchuck]

> How do we build better models to give access to wealth creation outside a small number of highly leveraged technology companies to a wider group of society?

We have one - the stock market. $100 invested in Amazon the day it started trading would be worth something like $20,000 today.

Investing in the market has become very democratized. Online brokers offer inexpensive access to everyone, and you can start investing for $100 or less.

[manfredo]

This isn't necessarily a solution. Investing lets one multiply the disposable wealth they already have - but wealthy people have more, and can invest a larger percentage of their assets. I would've be surprised if the share of capital gains income is even more unequal than all income.

[skookumchuck]

> but wealthy people have more

You'll need some data to back that up!

> share of capital gains income

Low income people have an advantage because they don't pay capital gains taxes.

[fungiblecog]

So gambling is your solution? It's easy to identify Amazon after the fact just like it's easy to identify the winner of a horse race. Go back to the dawn of Amazon and invest $100 in some of the other startups that look just as likely to be big and now your $100 is $0

[skookumchuck]

> So gambling is your solution?

Gambling has a mathematical downward bias. Investing has a mathematical upward bias. (That's my definition of the difference.)

I find it rather unfair to argue that wealthy people make money off of investments, but that non-wealthy people shouldn't invest because positive returns are not guaranteed. Well, they aren't guaranteed for wealthy people, either, but they invest anyway.

[charlesdm]

Everything in life is gambling and probability. Take a job? You might get fired tomorrow. Start a business? It might fail. Invest in a company? It might turn out to be worth a billion, or $0. Borrow money from a bank? They might try to screw you over at some point, or not. The economy might tank tomorrow. The market might tank tomorrow. An astroid might hit the world in six months.

[manjushri]

Seems like a strawman argument. Sure, metaphorically "everything" might be gambling, but the point is to play games with better odds for everybody except the casino.

[rosser]

How does that help people who don't even have that $100 to spare? They'd benefit far more from meaningful access to an economy's growth, wouldn't they? The people who can afford to do that in a way that truly pays off already have plenty of money.

The stock market is open to more people, but it still biases disproportionately for those that have more money.

[skookumchuck]

> people who don't even have that $100 to spare?

This country does not consist of 1% super rich and 99% who do not have even $100.

[rosser]

I don't see where I said it did. You didn't answer my question.

EDIT: Forty-some percent of Americans don't have the cash on hand or free credit to handle an unexpected $400 expense. [0] That statistic is almost 3 years old. I doubt it's gone down in that time.

[0] http://www.politifact.com/punditfact/statements/2015/jun/09/...

[skookumchuck]

I am addressing the income inequality issue. It doesn't need to apply to 100% of the population to be effective.

[rosser]

How is a thing which half the population doesn't have the disposable income to participate in "effective" in addressing income inequality?

[throwaway1748]

Has investing in the stock market become democratized? Sure you could invest in Amazon at a low market cap back in the 90's, but what about Uber, Stripe, Dropbox, or any recent breakout 'unicorn'?

The privatization that has happened in financing high-growth startups is not great news for Joe Q Public

[skookumchuck]

The market has gone up 30% in just the last year, and that has nothing to do with high-growth startups.

Amazon has doubled in just the last two years. So did Netflix, Apple, etc., all long past their IPOs.

This was all available to John Q Public. Yet all I hear are complaints.

[dv_dt]

So, to paraphrase, the market in it's infinite generosity allows paupers to invest in stocks as well as billionaires?

[youdontknowtho]

All that energy and money could be put into good governance and public programs. It has worked before.

EDIT: Totally agree on ICO's, but I also think new kinds of private funding are interesting.

[golergka]

If I may ask, why do you see that as a problem?

[dulse]

I think super asymmetric societies are less just. I'm not sure I'm a Utilitarian in all things, but I think we should try to make as many people as happy and content as possible, not the 1% or 0.1% of society. I'm OK with there being unhappy or less privileged people, but a just world should be closer to a normal distribution (and your outcome should be based on the content of your character, not your birthright).

Maybe something closer to the Star Trek vision of the future (vs. the other two sci fi visions I mentioned).

[golergka]

> a just world should be closer to a normal distribution

That completely contradicts my subjective experience with people: 90% of them are insufferable.

> and your outcome should be based on the content of your character, not your birthright

And this goes again any parent's wish to use all his resources to help his child succeed and outcompete others.